What can my organisation do to ensure that I comply with the AWR?
Are you a Hirer?
If you are a Hirer you need to ensure that you are fully conversant with your obligations under the AWR. To summarise;
- Familiarise yourself with the Day 1 rights afforded to agency workers
- Is it likely that the assignment will continue for a period of more than 12 weeks?
- If yes, the requirement is to simply treat the agency worker as if he or she had been recruited directly to the same job. You can take into account qualifications, experience or expertise.
- In most cases “equal treatment” can be confirmed by the “as if” rule. Are you treating the employee as if they had been recruited directly?
- Ensure that the comparison is a fair one e.g. what would the relevant terms be if the agency worker is working on an equivalent part time fixed term or flexible basis.
Temporary workers are a very useful addition to some workforces. However Employers need to be clear of their objectives. Using an agency worker on a series of continuous assignments is no longer a viable option if the intention is to pay for the work at a lower rate than recruiting directly.
Are you a Temporary Work Agency?
If you are a TWA you need to ensure that you are fully conversant with your obligations under the AWR. To summarise;
- In order to ensure that the agency worker receives their correct entitlement, the TWA will normally want to ask the agency worker for their up to date work history, the aim being to ensure that they have the correct information with regards to that worker accumulating the 12 week qualifying period in the same job with the same hirer. This is already common practice for some TWA’s, who already be asking for this information, Failure to do so could leave the TWA in a position where it may become liable, in whole or part, for any lack of equal treatment arising as a result.
- While there is no legal obligation on the agency worker to provide information on previous assignments, if an agency worker fails to inform the agency when asked that they have worked for a hirer in the last 6 weeks and then brings a claim for equal treatment, the tribunal may take this into account in making any award
- For each vacancy a TWA receives from a Hirer, you must record details about the vacancy including the details as set out in separate, pre-existing legislation, the Conduct of Employment Agencies and Business Regulations 2003, before you introduce or supply an agency worker to that Hirer.
- Ask the Hirer for information about basic working and employment conditions. If it is clear at the start of an assignment that it will last for more than 12 weeks and the TWA might ask for information at an early stage – or even in advance of the assignment starting. But this is a matter between the TWA and Hirer and no timescale has been deliberately set out in the AWR. In some instances the assignment may be scheduled to last for less than 12 weeks but is extended. In this situation, the TWA should contact the hirer to obtain information as the agency worker can request information, in writing, any time after the 12 weeks has elapsed. The information should include:
- the level of basic pay (based on the annual salary an agency worker would have received if recruited directly, usually converted into hourly or daily rate, taking into account any pay increments)
- if and when there are overtime payments and shift/unsocial hours allowances or risk payments for hazardous duties
- types of bonus schemes they operate (and how individual performance is appraised)
- if they offer vouchers which have monetary value
- annual leave entitlement.
- While day 1 entitlements are the responsibility of the Hirer, it may be useful for the TWA to enquire about the facilities on the Hirer’s premises and how they provide information on their job vacancies.
There is an exemption from equal treatment provisions on pay only where a TWA can offer an agency worker a permanent contract of employment and pay the worker between assignments. In order to benefit from this derogation (commonly named the Swedish derogation after the Swedish representatives who negotiated this provision into the Agency Workers Directive) a TWA must;
- Explain the implications to the agency worker so they can make an informed decision and it is recommended that an agreement is evidenced in writing to that effect;
- Employ the agency worker on a permanent written contract of employment including a statement that the employee is foregoing entitlements under regulation 5 in so far as they relate to pay;
- Pay the employee between assignments at a rate of at least 50% of assignment pay based on the previous 12 weeks and not below the NMW.
The position is more difficult for umbrella companies. They will fall within the definition of a TWA but in reality may have an arms length relationship with the Hirer. Where there are intermediaries involved the Court will look to decide which party was responsible for any breach to the extent that it is responsible for the infringement. This does not however mean that the umbrella company can automatically absolve themselves of liability by passing the responsibility to another TWA.
In order to demonstrate due diligence it is recommended that umbrella companies take the following action:
- Ask the recruiting TWA to furnish the umbrella company with the information they have obtained from the agency worker and the Hirer as set out above;
- Ensure that their terms and condition with the recruiting TWA have a liability clause to the effect that if the agency behaves in a manner that prejudices their position in relation to AWR then the agency will indemnify the umbrella company for any legal costs and any awards made to an agency worker;
- Be aware that majority of the obligations that fall to the TWA only apply after the 12 week qualifying period;
- Consider negotiating with the TWA in relation to payments that could be made under the rules relating to Derogation.
Support and more detailed guidance on the AWR can be provided by contacting Income Made Smart LLP.